I have "contacts" that are websites. I want to add large amounts of custom data to my contacts. An example of the type of data I want to add can be seen in this "report" https://freephile.org/wikireport/?wikiUrl=http://wikia.com

How should I setup my CiviCRM with all these custom fields (profiles?, custom field sets?)

Once the database is setup, I envision populating the data through the API, but is there any particular method for populating data sets that I should be aware of? (I've already figured out the basics of checking a record, and storing a simple relationship like contact+website)

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You need to configure one or more Custom Data Sets to contain the information you wish to maintain. Generally you would want to split the information across data sets to reflect any natural categorization, for instance having datasets for 'Wiki Report', 'Extensions', and 'Statistics'.

If you are planning on using the API to load the data, you don't necessarily need profiles (unless you anticipate also doing some manual entry). Profiles can also be used for display, but (if on Drupal) you may find views much more useful for display.

(datasets maintain the actual definition and storage of custom fields; profiles generally provide forms for the entry of the custom field data, or for display of information.)

Using the API is fairly straightforward so you shouldn't have any problems with that I don't think. Using the API explorer (yoursite/civicrm/api/explorer) is a hugely useful tool for figuring out the proper call methods.

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